Friday, April 12, 2024

AS I SEE THINGS: The entrepreneurial state – Part 2


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IN LAST WEEK’S COLUMN, I introduced the vitally important concept of “the entrepreneurial state” within the context of the roles that can be played by governments in shaping the economic landscape of countries whether small or large, rich or poor, resourceful or not.

This week’s contribution brings to light a rather critical issue which should deepen the public’s understanding of how and why we in the Caribbean, as well as other countries, need an entrepreneurial state.

You see, for several decades some economists and pundits have been strongly promoting the idea that the private sector is more efficient than the public sector and that governments ought to step aside and allow businesses to lead the way towards economic growth and development via the free marketplace. 

Evidently, that model has not worked to the full expectation of its main exponents and proponents. The 2008-2009 global economic and financial crisis is a blistering example of what can potentially happen if and when governments fail miserably to properly oversee, effectively regulate and closely monitor what is happening within the private sector.

Hence, therefore, there is a distinct motivation for us in the Caribbean with extremely small, open economies to seek alternative strategies to promote economic growth and development. In doing so, we must appropriately address and defeat the narrow ideology of “the private sector does everything, with the state’s role confined to that of fairly passive facilitator” and with a minimum of “regulation” of private sector activities. 

After all, understanding the structure of our economies, the constraints we have to live with forever and determining what works best for us are all things that must be taken on board in our quest to achieve economic prosperity. The model we choose to guide us going forward has to be consistent with our realities.

To strengthen the case for an entrepreneurial state, it is worth reminding all and sundry that nearly every major technological breakthrough in the United States for the last one hundred years was a product of state, yes, state, not private sector research and development. These technological advances include (i) the information revolution – Internet, satellite television, global positioning system and (ii) even such everyday kitchen items like non-stick pots, pans, saucepans, and frying pans.

Further country experiences that include, for example, the issue of industrial policy: the targeting of “winners” by the state and the close state-private sector collaboration in setting and achieving specified socioeconomic goals; the role of the ministry of international trade and industry in Japan’s economic transformation, which some have labelled an economic miracle; other aspects of how Japan, then South Korea and more recently China have all achieved their economic outcomes; and the magnificent success of Singapore, a country the size of Jamaica, should reinforce the significance of the entrepreneurial state in shaping the economic and financial landscapes of our countries. 

Need your humble servant convince you more of the urgency of streamlining and implementing the notion of an entrepreneurial state to advance our socioeconomic cause here in the Caribbean?

Remember the old adage: “If it is not broken then do not fix it.” Our recent economic history illustrates without ambiguity that our strategies and approaches to growth and development are broken and hence in need of urgent reconfigurations. A new modus operandi is therefore inevitable and the model of an entrepreneurial state fills that void passably.



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